Correlation Between Firstrand and Sasol
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By analyzing existing cross correlation between Firstrand and Sasol Ltd Bee, you can compare the effects of market volatilities on Firstrand and Sasol and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Firstrand with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firstrand and Sasol.
Diversification Opportunities for Firstrand and Sasol
Very weak diversification
The 3 months correlation between Firstrand and Sasol is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Firstrand and Sasol Ltd Bee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasol Ltd Bee and Firstrand is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Firstrand are associated (or correlated) with Sasol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sasol Ltd Bee has no effect on the direction of Firstrand i.e., Firstrand and Sasol go up and down completely randomly.
Pair Corralation between Firstrand and Sasol
Assuming the 90 days trading horizon Firstrand is expected to generate 0.35 times more return on investment than Sasol. However, Firstrand is 2.83 times less risky than Sasol. It trades about 0.05 of its potential returns per unit of risk. Sasol Ltd Bee is currently generating about -0.01 per unit of risk. If you would invest 543,010 in Firstrand on September 3, 2024 and sell it today you would earn a total of 226,390 from holding Firstrand or generate 41.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Firstrand vs. Sasol Ltd Bee
Performance |
| Timeline |
| Firstrand |
| Sasol Ltd Bee |
Firstrand and Sasol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firstrand and Sasol
The main advantage of trading using opposite Firstrand and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firstrand position performs unexpectedly, Sasol can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sasol will offset losses from the drop in Sasol's long position.| Firstrand vs. Sasol Ltd Bee | Firstrand vs. Centaur Bci Balanced | Firstrand vs. Sabvest Capital | Firstrand vs. Growthpoint Properties |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Directory module to find actively traded commodities issued by global exchanges.
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